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9/11

Zynga IPO may raise $1 billion

Monday, December 12, 2011 - 01:57

Dec. 12 - Zynga, the maker of Farmville, may raise as much as $1 billion during an IPO planned for Thursday. It would be the biggest U.S. Internet IPO since Google in 2004. Carmen Roberts reports.

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Social game maker, Zynga, hopes to translate its success in Farmville to Wall Street. The company plans to sell 100 million shares for as much as $1 billion in an initial public offering this week. Many investors are eager to own a piece of the company, known for Farmville and Mafia Wars, because unlike many game makers, it earns a profit. Zynga makes money by selling virtual items to its more than 260 million active users. Lance Ulanoff, Editor in Chief of Mashable, says that business model is sustainable. SOUNDBITE: LANCE ULANOFF, EDITOR IN CHIEF, MASHABLE (ENGLISH) SAYING: "It's really an established business. It is making a tremendous amount of money through people playing games in some of the most popular social networks on the planet, in particular, Facebook." Zynga is being cautious about its IPO. It scaled back the value of the deal from $14 billion to around $9 billion. Other recent internet IPO's like Groupon and Pandora Media are now trading below their IPO price. Even with a smaller deal, Zynga's may be the largest Internet offering since Google raised $1.7 billion in 2004. The vast majority of Zynga's games are played on Facebook, but Zynga sees bright a future in games for smart phones and tablets. Analysts say the company will face tough competition there from others with a lot more cash, including Disney and Electronic Arts. Still, Ulanoff says Zynga may have an advantage with its built-in audience. SOUNDBITE: LANCE ULANOFF, EDITOR IN CHIEF, MASHABLE (ENGLISH) SAYING: "There is going to be an amazing amount of competition in the mobile space, but remember Zynga is already on Facebook. It already has million, 47 million people check into Zynga games every day." Zynga expects to price on Thursday and start trading Friday under the ticker, Z-N-G-A. Carmen Roberts, Reuters.

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Zynga IPO may raise $1 billion

Monday, December 12, 2011 - 01:57